A Salvation Army building in Greenwich Village will be redeveloped into contemporary offices by KPG Funds.
The Soho-based firm, whose business model is to purchase aging but architecturally significant buildings and convert their Class B and C office space into Class A, signed a 99-year ground lease Wednesday for 132 West 14th Street with the Salvation Army.
With 75 feet of frontage, the lobby of the aptly named “Le Gallerie” will also serve as an expansive art gallery with displays highlighting influential street artists.
Although just seven stories, the 57,478 square-foot building between Sixth and Seventh avenues offers sweeping views across the low-rise neighborhoods to the south.
Asking rents are expected to be north of $70 per square foot. KPG committed to pay about $30 million over the century-long lease.
“We will redo the entire building, so having the opportunity to long-term lease a boutique office building in a burgeoning area was too good for us to pass up,” said Greg Kraut, CEO of the firm, which he co-founded with Rod Kritsburg in 2014.
“The idea that office is dead in New York City is nonsense,” Kraut added. “Office is just being redefined in 2021 by landlords who provide a bespoke experience that employers need to give to their employees.”
KPG’s design team will work with its architects on a gut renovation. “Our goal is to have the lobby, the elevators and pre-built floors ready by January,” the CEO said.
The Salvation Army was represented by James Nelson and Charles Kingsley of Avison Young. Andreas Metzger of the Corcoran Group also advised the Salvation Army on the transaction.
“This agreement created an opportunity for the Salvation Army to generate a sustainable revenue stream that will support our mission of providing programs and services that address the human needs in our community.” said Col. Ricardo Fernandez, divisional commander of nonprofit’s Greater New York Division, in a statement.
The service provider has consolidated its offices and programming into its executive headquarters next door.
KPG’s Kritsberg said the deal reflects the firm’s confidence in the city’s commercial real estate and employment market.
“The pandemic year created extraordinary opportunities for those that steadfastly believed in a New York City recovery,” he said. “We never questioned if the city was coming back, but when. By ignoring the headline news and noise we are being rewarded with the ability to enter into a long-term ground lease in a prime location and create a KPG-style building.”
KPG also owns and redeveloped L’Atelier at 446 Broadway, 2 Crosby Street and 141 East Houston Street and is in the process of acquiring and repositioning similar properties.